Today's Hack

Everyone we’re working with for a retirement plan has to keep an eye on the age of 72 because that’s when the required minimum distributions begin. While we all know money has to come out of our retirement accounts, it’s not as simple to understand all the requirements and then execute that efficiently. Today we’ll provide you a deep dive into RMD starting with the accounts you own in part one.

It’s time to spend some time on a piece of planning in retirement that can trip up some people because it’s a bit confusing and that’s RMDs. For those that aren’t familiar, we’re talking about required minimum distributions.

As we break this down on the show, we’re going to separate it out into two different pieces: RMDs on your own accounts and RMDs on inherited accounts. There are so many details – not all of them clearly laid out – that you really need to have a financial advisor on your side to help you build a plan for how you’ll pull out the money when it’s time.

Today’s episode will be a great primer for that discussion whenever you meet with your advisor. If you’re someone that’s coming up on this key age of 72, you’ll want to pay close attention to everything we discuss.

Join us on today’s episode as we break down these major topics:

  • What you need to know and what’s changed about RMDs on your own accounts. [2:02]
  • The big difference between a Roth IRA and Roth 401(k). [4:09]
  • What can you do with your RMDs if you don’t need to use the money immediately? [13:30]
  • What has to happen at age 72 and what can be done after. [17:47]
  • The penalty if you miss your RMDs and how the IRS handles that. [19:56]

A Quotable Moment

“This is something we work with clients on a lot and we’re planning for age 72. Typically, we’re working with a client prior to that age and running the math out.”

-Phil Putney

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